LOWER HOUSE ADOPTS PACKAGE OF TAX LAWS

ZAGREB, Dec 7 (Hina) - The Croatian parliament's House of Representatives on Thursday evening adopted a package of four tax laws - on general taxation, tax counselling and income and profit taxes. #L# The general taxation law and the law on tax counselling were adopted unanimously whereas the other two laws were adopted with a majority vote as the Opposition voted against. In a debate that preceded the vote, most objections were directed against the cancellation of the protective interest rate because, deputies said, many companies would have to pay higher taxes than now. Some deputies also opposed the introduction of taxes on dividends because, they said, this would have a negative effect on share ownership. It would stimulate investments in banks and not in the economy, they said. The Opposition also doubts that the introduction of a third tax rate would be useful. It is necessary to raise the lowest wages and reduce discrepancies between wages and this measure will not achieve it. According to some deputies, one should introduce more income tax rates. The Opposition also objects that the authorities are not reducing the Value Added Tax rate, which they had promised to do before the elections. Zorko Vidicek of the Social Democratic Party (SDP) said the authorities had decided now to decrease taxes in the economy. This, he said, should result in a further decrease of the price of labour, which will stimulate the economy and benefit all citizens. Finance Minister Mate Crkvenac dismissed claims by the Opposition that the economic crisis is deepening. We have made a turnabout from many negative trends and all world agencies have been reporting that the risk of investing into Croatia has decreased and that the country's credit rating has been improving, said he. These are the last changes to profit and income taxes, meaning that the tax system in the future will be stable, which will have a positive effect on foreign investors, said Crkvenac. (hina) jn rml